UK back in recession

We're in a weaker position than during the Great Depression

Figures out yesterday show that the UK economy went backwards in the first quarter of 2012.  The preliminary estimate of GDP from the Office for National Statistics states that GDP fell 0.2%.  Few forecasters expected this.  The fall is driven primarily - but not exclusively - by the construction sector so could be revised up later.  Nevertheless, it is a sobering statistic.

Even more sobering is this chart, taken from ONS data in its Economic Review this month.  The ONS notes that: “The stuttering nature of growth following the recession means that the economy is weaker relative to its pre-recession peak than at the corresponding stage of the depression in the early 1930s. It is also well below where it would have been if it had followed the path of either of the recessions in the early 1980s and early 1990s.”



That is what happens when we have a government committed to 'austerity' but not in practice to growth.